Question

The following table gives information on the limited tread warranties (in thousands of miles) and the prices of 12 randomly selected tires at a national tire retailer as of July 2012.

a. Taking warranty length as an independent variable and price per tire as a dependent variable, compute SSxx, SSyy, and SSxy.
b. Find the regression of price per tire on warranty length.
c. Briefly explain the meaning of the values of a and b calculated in part b.
d. Calculate r and r2 and explain what they mean.
e. Plot the scatter diagram and the regression line.
f. Predict the price of a tire with a warranty length of 73,000 miles.
g. Compute the standard deviation of errors.
h. Construct a 95% confidence interval for B.
i. Test at a 5% significance level if B is positive.
j. Using α = .025, can you conclude that the linear correlation coefficient is positive?